The author is a columnist of the JoongAng Ilbo.
Korean finance goes nowhere because of three stumbling blocks — the presidential office, labor unions and the financial regulators. The new CEO of state-invested Industrial Bank of Korea (IBK) Yoon Jong-won has been unable to get to his office last week. Unionized employees have been blocking his entry in protest of his “parachute” appointment and the former presidential economic secretary’s lack of “expertise on finance.”
The IBK chief post has become a reward for former senior presidential secretaries, claimed IBK union chief Kim Hyung-seon in demanding Yoon to resign from office. The bank’s pride has been hurt because its 10-year legacy of internal promotion ended with Yoon’s arrival, another bank official said.
The new CEO to a state lender usually takes the union’s “unwelcoming” ceremony in stride as a customary ritual. Lee Dong-gull, named to head Korea Development Bank two years ago, was able to move up to his office after he endured a four-hour-long conference with the union. Eun Sung-soo could finally get to work one week after he was appointed to head the Export-Import Bank of Korea. Outsiders are politely asked to endure the union hostility as a small catch to the prestigious job. It is the way the union makes its stand against the new CEO and compels compromises on labor demands on working conditions or no layoffs. It is no wonder no improvement is made with public financial institutions.
IBK had its first internally promoted chief under the government of former President Lee Myung-bak. Previously the post was reserved for retired senior officials from the Ministry of Economy and Finance.
After Cho Joon-hee in 2010, Kwon Seon-joo succeeded in 2013 and Kim Do-jin in 2016. Former President Park Geun-hye initially tapped a former vice finance minister for the post but finally agreed to promote Kwon instead.
While on the opposition side, Moon and the ruling party lambasted at former conservative governments for their “parachute” appointments for rewarding loyalists to the chief posts at public institutions. During his campaigning, Moon vowed to do away with the shameful tradition. But once in the ruling power, they have been equally generous in giving away CEO posts.
The Blue House claimed staff from the presidential office best understands the governance philosophy. But banking leadership comes from expertise in the field not experience in the presidential office. Moreover, it has hurt the morale of the employees by seating one of its people to govern over them.
The financial authority has been nowhere in sight. It has stayed on the sidelines while the Blue House pushed ahead with its ways and enhanced the state influence over banks. Yoon should not be blamed. He is not a loyalist to Moon or someone from the student dissident generation. He was a career bureaucrat who was recruited to the Blue House. He stayed as an outsider and finally was pushed out after a year in office. Few senior secretaries for economic affairs have been removed without being offered the chance to run for election or a seat in the cabinet.
The Blue House has awarded the IBK post to Yoon out of generosity and to keep its inner circle tight. Korean finance is such a wreck because what concerns the ruling power is to keep its team members happy. The financial authority should be ashamed to be so powerless over financial affairs.
JoongAng Ilbo, Jan. 9, Page 30